University offers incentives to staff for early retirement

STANFORD -- Stanford University trustees approved an early retirement
incentive program for staff on Tuesday, Feb. 11, as part of the university's
current budget-trimming process.

The incentive plan would provide an alternative to lay-offs in many
departments by making it possible for approximately 1,200 of the university's
8,000 staff members to apply for early retirement between March 15 and Aug.
31, 1992.

Non-tenure-line faculty, senior lecturers and senior research associates
also may apply for this program. Those who are eligible and opt for
retirement by Aug. 31, 1993, would receive supplemental pay as a recognition
of their service to Stanford, and they would be eligible for university
medical and tuition grant programs.

Those who are eligible for the program fall into two categories:

Employees who are at least age 55 with a minimum of 10 years of
benefits-eligible service, that is, service at 50 percent of full- time
employment or more. This group already is eligible for retirement, but the
new incentive program offers them supplemental pay in addition to usual
benefits.

Employees of any age with a minimum of 10 years at 50 percent time or
more, provided that the employee's age plus years of service equal at least
75.

Those who are 55 with 10 years of service are already eligible for
retirement. The new incentive program, however, offers them supplemental pay
in addition to the other benefits of retirement.

The incentive program is the first opportunity for those under 55 with
substantial years of university service to receive retirement benefits, which
include retaining eligibility for the university tuition grant program and
its medical insurance programs. They would also receive the supplemental pay
incentive.

The amount of the retirement pay incentive increases with the length of
career employment at Stanford, said Jim Franklin, manager of the university's
benefits programs.

"The minimum will be four months of salary with 10 years of service, and
the maximum will be 12 months of salary with 25 years' service," he said.

The incentive will be paid as a salary supplement in the time period
between the approval of the employee's retirement or the date on which he or
she becomes eligible, whichever is later, and his or her elected retirement
date.

Eligible employees will be notified by mail in early March, Franklin said,
and managers will get lists of employees who are eligible in their areas.

Currently, employees in collective bargaining units are not covered by the
new program. Extension of the early retirement benefit to them would be
subject to agreements between the university and the unions who represent
them - the United Stanford Workers and the Stanford Police Officers
Association.

An early retirement incentive program already exists for tenure-line
faculty, although it is being phased out. Eligible faculty may apply before
Aug. 31 for retirements as late as Sept. 1, 1994. As part of a phase-out of
that program, Provost James N. Rosse notified tenure-line faculty by letter
on Dec. 20 of the application deadline. Questions about the faculty program
can be directed to Kathryn Gillam, assistant provost for faculty affairs.

"The new staff incentive plan offers a positive way of down- sizing and
provides recognition of career service," said Franklin.

The plan is only for voluntary retirements, and participation in the
program would not normally be denied, he said. The effective date of the
retirement is subject to mutual agreement, with management making the final
determination based on business necessity, according to the description of
the plan approved by the Board of Trustees.

"I have heard from a number of staff who feel an early retirement option
is an important alternative for the university to make available as part of
its budget reduction process," said Robert Street, vice president for
libraries and information resources. "Even though it is a limited program, I
think it will be greeted with enthusiasm by staff in my area. We intend to
work directly with individuals in Libraries and Information Resources to make
sure they have a full appreciation of retirement and the economic and career
aspects of it."

Franklin stressed that information on how to calculate the incentives for
specific individuals is not yet available from the Benefits Office. Such
information will be available in writing to all those who are eligible prior
to the opening of the application period on March 15, he said.

"There will be seminars for managers in March to fill them in on the
program and how it can be managed," Franklin said. Seminars for eligible
employees will be held regularly from March through August, he said.

The Benefits Office staff is developing printed materials to help
employees assess the appropriateness of the program to their particular
needs, he said.

The short-term costs and longer term savings of the program to the
university cannot be calculated until it is known how many people choose to
take advantage of the program, Franklin said. The one-time costs of the
incentives will be added to the fiscal 1993-94 university operating budget,
and the savings will show up yearly in the form of reduced salary and
benefits costs for departments, according to Joanne Coville, acting
controller.

Over 11 years, the savings could be as much as $4 for every $1 of
incentives, Franklin said. Eleven years is the average length of time that
early retirees would have worked at Stanford had they chosen to delay
retirement until age 65 .

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